Sean Lane's purchase was supposed to be a surprise for his wife. Then it appeared as a news headline -- "Sean Lane bought 14k White Gold 1/5 ct Diamond Eternity Flower Ring from overstock.com" -- last week on the social networking Web site Facebook.

Without Lane's knowledge, the headline was visible to everyone in his online network, including 500 classmates from Columbia University and 220 other friends, co-workers and acquaintances.

And his wife.

The wraps came off his Christmas gift thanks to a new advertising feature called Beacon, which shares news of Facebook members' online purchases with their friends. The idea, according to the company, is to allow merchants to effectively turn millions of Facebook users into a "word-of-mouth promotion" service.

Lane called it "Christmas ruined," and more than 50,000 other users signed a petition in recent days calling on Facebook to stop broadcasting people's transactions without their consent.

Last night, Facebook backed down and announced that the Beacon feature would no longer be active for any transaction unless users click "ok." Beacon is a core element of Facebook's attempt to parlay the personal and behavioral information it collects about its members into a more sophisticated advertising business, an effort to turn a user's preferences into an endorsement with commercial value.

The merging of social networking and online advertising combines two of the most powerful forces on the Internet today, and privacy advocates say it raises issues about the way personal data are disclosed for marketing purposes.

"Sites like Facebook are revolutionizing how we communicate with each other and organize around issues together in a 21st century democracy," said Adam Green, a spokesman for MoveOn.org, a liberal activist group that has launched the petition drive to pressure Facebook to stop broadcasting members' purchases and using their names as endorsements without explicit permission. "The question is: Will corporate advertisers get to write the rules of the Internet or will these new social networks protect our basic rights, like privacy?"

The site, which was started in a Harvard dorm room, has become a Silicon Valley powerhouse, recently valued at $15 billion. It allows its users to share messages, photos and updates on their lives.

Facebook launched Beacon as part of a wider social advertising campaign Nov. 6, with 44 announced partners, including Overstock, Travelocity, the auction site eBay, the movie ticket site Fandango, Blockbuster and the shoe site Zappos. The Beacon feature, free to advertisers, is not restricted to commerce. A person's high score on an online game might also be posted for friends to see.

Facebook puts a string of code called a cookie on a user's computer, which tracks the user on Beacon partner sites. In the version that Facebook launched, a person logged into Facebook who bought, say, a movie ticket, was alerted that the Web site was sending a "story" to his profile and had a chance to opt out -- both at the merchant's site and on his own page, Facebook says.

But privacy advocates criticized the opt-out feature -- a pop-up box -- because it disappeared after a few seconds and said Facebook should allow users to turn off Beacon and include an "opt in" feature for those who wish to receive the service. Last night, Facebook apparently added an "opt in" feature for each transaction, which Green called "a huge step in the right direction," but still did not include a way to shut off the service permanently.

Beacon is a key part of what Facebook founder and chief executive Mark Zuckerberg, 23, called "a completely new way of advertising online." Sometimes, ads accompany the news feeds. The ads could contain a person's photo.

Yesterday Facebook issued an apology on MoveOn's Facebook page: "We're sorry if we spoiled some of your holiday gift-giving plans."

In a news release last night, Facebook said "we appreciate feedback from all Facebook users and made some changes to Beacon in the past day. Users now have more control over stories that get published."

Marketers can target paid social ads on Facebook according to criteria such as age, gender, political views and taste in movies, Zuckerberg told media and ad executives at the launch, according to Online Media Daily.

"What's unique about Facebook is it's really turning over personal profile data to advertisers," said Jeff Chester, executive director of the Center for Digital Democracy, a privacy advocacy group. "In essence, it's telling advertisers, we know exactly who your targets are, what their favorite entertainment is, the books they read, the kinds of social networks they have, what their political leanings are."

Chester's group, along with the U.S. Public Interest Research Group, has asked the Federal Trade Commission to investigate whether Facebook and MySpace, a rival social networking site that is also targeting members for ads, are using deceptive practices to violate people's privacy.

MoveOn has created a blog on its Facebook page for people to post comments. The wall contained more than 800 as of yesterday.

They include Tasha Valdez from Michigan, who wrote: "Oh my gosh, my cousin's entire Christmas shopping list this week was displayed on the [Facebook News] feed. That's so messed up. This has gotta stop!"

Beacon's risks go beyond ruining someone's Christmas, said Mike Rogers, editor and publisher of a gay-oriented Web site, PageOneQ. "We teach young people to be very careful about what they post and all of a sudden comes along an automated system like this. What happens if a kid is on a football team and he buys a ticket to 'Brokeback Mountain' [a gay-themed film]?" he said, alluding to the possibility that the youth could be outed and harassed as a result.

For Lane, spoiling his wife's surprise was bad enough.

Within two hours after he bought the ring on Overstock.com, he received an instant message from his wife, Shannon: Who is this ring for?

What ring, he messaged back, from his laptop at work in Waltham, Mass.

She said that Facebook had just put an item on his page saying he bought a ring. It included a link to Overstock, which noted that the 51 percent discount on the ring.

Lane, 28, a technical project manager at an online printing company, was crestfallen. He had gone to lengths to keep the ring a secret, even telling Shannon he was not going to give her jewelry this year.

Lane complained to Overstock. Company spokesman Judd Bagley said this week that on Nov. 21, Overstock abandoned its Beacon feature until Facebook changes its practice so that users must volunteer if they want to participate.

"I was really disappointed because for me the whole fun of Christmas is the surprise," said Shannon Lane, 28, who married Sean a year ago in September. "I never want to know what I'm getting."